Chocolate manufacturers have already adjusted prices upwards for consumers, after three years of poor cocoa harvests and with a fourth on the way, due to the crisis faced by the two main producing countries, which represent almost 60% of the world supply of cocoa.
According to Reuters reports, cocoa prices have more than doubled in the last year, reaching numerous all-time highs.
A recent report from CaixaBank, based in Spain, warned about the delicate situation it faces the chocolate industry and how this impacts consumers of this popular product.
For the first time in half a centurythe price of cocoa has experienced a sharp increasewhich generates direct repercussions on both production and prices of the chocolate. According to four trade sources, the main African cocoa factories in Ivory Coast and Ghana have stopped or reduced their processing due to the inability to acquire grains, suggesting a likely increase in global chocolate prices.
This Thursday, Cocoa futures rise sharply in the United States, up more than 5%. Meanwhile, in London, the same thing happens and they climb up to 6% to US$6,060 per tonvery close to the historical highs it reached in recent days.
Cocoa: the root of the problem
Chocolate manufacturers have already adjusted prices upwards for consumers, after three years of poor cocoa harvests and with a fourth on the way, due to the crisis faced by consumers. two main countries producers, who represent almost 60% of the world’s cocoa supply.
According to Reuters reports, lCocoa prices have more than doubled in the last year, reaching numerous historical highs.
Chocolatiers face difficultiessince they cannot produce chocolate without raw cocoa and depend on processors to convert the beans into butter and liquor that can then be transformed into chocolate. However, processors say they cannot afford to purchase the beans.
In Ghana, The second largest cocoa producer, most of the eight processing plants, including the state-owned Cocoa Processing Company, have repeatedly suspended operations for weeks since the start of the season in Octoberaccording to two sources in the sector.
Rising prices have created problems in the long-established mechanism of the global cocoa trade, where farmers sell cocoa beans to local traders, who in turn sell it to processing plants or international traders.
In normal situations, the market is highly regulated: traders and processors buy from local distributors up to a year in advance at pre-agreed prices. However, in times of scarcity like the current one, the system breaks down: Local traders often pay farmers a premium above the market price to ensure grain supplies.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
